International news

U.K. fines, bans two ex-brokers over Libor rigging

MaxColchester

A U.K. regulator Thursday fined and banned two former senior executives at broker Martin Brokers Ltd. for compliance failings in relation to rate-rigging.

The Financial Conduct Authority fined Martin Brokers's former chief executive, David Caplin, GBP210,000 ($317,824) and former compliance officer, Jeremy Kraft, GBP105,000. Both were banned from holding senior roles in the finance industry. The fines come eight months after the brokerage was fined for allegedly helping a trader rig an interbank lending benchmark.

"The FCA has found that Caplin and Kraft's failings contributed to a culture at Martins that permitted...manipulation to take place and enabled the misconduct to continue undetected over a prolonged period," the regulator said in a statement.

The FCA said between 2005 and 2011 Mr. Caplin failed to put in place controls to prevent brokers making or receiving "corrupt inducements." Mr. Kraft didn't challenge Caplin on compliance issues, in particular on the role of compliance staff in monitoring the front office, the FCA said. In May last year the FCA fined Martin GBP630,000 for misconduct related to attempted manipulation of the London Interbank Offered Rate. The fine would have been significantly larger but the broker was unable to pay. Mr. Caplin left Martin Brokers in 2013.

During the time in question Mr. Caplin was chief executive officer of RP Martin Holdings Ltd., owner of interdealer broker RP Martin. Mr. Kraft also was an executive of the firm, according to regulatory filings. RP Martin suspended Mr. Caplin in 2013 in connection with Libor inquiries. London-based RP Martin Holdings last year was fined $2.3 million by regulators in the U.S. and U.K. over accusations of bribes related to Libor manipulation.

RP Martin's fine was discounted based on the firm's statements that it couldn't afford a higher amount that would have been assessed. The firm said its senior management cooperated with U.K. and U.S. regulators and accepted the fine.

At the end of 2014, RP Martin agreed to sell its primary assets to a rival interdealer broker.

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